Ron DeSantis wants to be seen as the right-wing warrior who took down Disney. Never mind that the company he has gone after is the single-biggest revenue driver in Florida, the state where he serves as governor -- DeSantis has an image he wants to create in his attempt to secure the 2024 Republican nomination for president.
Walt Disney (DIS) -) and DeSantis have ostensibly gone to war over former Disney CEO Bob Chapek's public stance against the Florida governor's so-called "Don't Say Gay" legislation. That turned into a political fight over the former Reedy Creek Improvement District (RCID) which has led to both parties filing lawsuits against the other.
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It's a situation that has gotten ugly with current Disney CEO Bob Iger trying to opt out of the non-business side of the argument.
“The last thing that I want for the company is for the company to be drawn into any culture wars,” he said during a CNBC interview.
Iger has been clear that his focus is on business while DeSantis has pushed Disney as a "woke" villain to Republican voters. That has led to a narrative that the governor has embraced where Disney's recent struggles at its Florida theme parks and the relative failure of its box office slate is because the company has pushed its "woke" agenda.
That's easy to dismiss on the theme park side as Comcast's (CMCSA) -) Universal Studios and Florida in general have seen the overall tourism business slow in recent months. You can't blame President Joe Biden's econonmy for the overall tourism issues, but then take credit for Disney's problems being some sort of anti-woke uprising.
The problems with the company's movie business aren't some sort of woke backlash either even if that's what DeSantis claims. The reality is that Disney has struggled to reach its pre-pandemic box office heights because the movie business has changed and it's never changing back.
Image source: Walt Disney
Disney Has to Change Its Movie Business
Before the pandemic, Disney had a very simple formula. It could release two Pixar movies, two or three Marvel films, a live-action remake of one its classics, and a Star Wars movie, with every film pretty much guaranteed to reach $1 billion in box office.
The company got the same sort of pushback over being "woke" for having gay characters in its latest Star Wars movies and making its live-action remakes of classic animated films with diverse casts as it's getting now. DeSantis did not pioneer this line of thinking or method of attacking Disney, but at the end of the day people weren't going to skip an Avengers film because the cast was too diverse or Loki might be bisexual and gender fluid.
Now, in 2023, Disney has released a number of films that have not performed well. That's not because DeSantis has galvanized the right to stand up to the company, it's because people don't go to the movies anymore.
Only one film, "The Super Mario Bros. Movie" has topped $1 billion globally in 2023. "Fast X" failed to reach that level as did Disney's "Guardians of the Galaxy Volume 3." That's not because people stopped being interested in those franchises but because the covid pandemic taught us that for most films, it was okay to wait a few months and watch them at home on a service you already pay for.
Disney Still Has What People Want
The pandemic killed the movie business. In reality, covid probably only hastened its death because people having big TVs and fast internet connections likely meant that going to a theater and paying high prices to watch a film would have eventually gone away even without the lessons we learned in lockdown.
The end of the movie business is not the end of Disney, but Iger has yet to pivot the company away from theatrical releases. Disney owns franchises people care about. That's basically the only thing that can get people to pay money to an entertainment company and the Mouse House has more of it than any three rivals combined.
Blockbuster movies cost hundreds of millions of dollars to make and similar amounts to promote. Disney already has multiple pipelines into people's home with Disney+, Hulu, ABC, and it cable networks. Iger has to figure out how to scale its content to make money using those platforms.
Maybe a new Avengers or Star Wars movie still hits theaters because those are rare, like Taylor Swift concerts, where people will pay a high price for a communal experience. That's going to be rare, however, and most Disney content will have to change to fit into a paid streaming model, an ad-supported system, or a combination of the two.
DeSantis will, of course, take credit and get people saying "go woke, go broke" when Disney's live action "Snow White" inevitably bombs at the box office. The film, however, won't fail because it could have a Hispanic Snow White or a diverse take on the former Seven Dwarfs. It's going to fail because no combination of Snow White and any amount of Dwarfs will get people to go to a movie theater when they can just wait to watch at home.
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